Trains keep rolling from Permian Basin on crude discounts

|By:, SA News Editor

Volumes are poised to continue to move out by rail from the Permian Basin oil fields, as production outpaces pipeline capacity and a refinery outage saps demand.

West Texas Sour priced in Midland, Tex., fell yesterday by $2.75/bbl to a discount of $11.50 to WTI crude at the Cushing, Okla., delivery hub, the largest difference since March 20.

Also, Phillips 66 (PSX) reportedly plans to shut most of its 146K bbl/day refinery in Borger, Tex., for as long as 35 days after it was unable to recover from a power failure.

Output in the Permian has jumped by 79% since year-end 2009, with the basin now producing ~1.57M bbl/day.

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